City Contracting Practices Leave Minority and Women-owned Businesses (M/WBEs) Behind

City Contracting Practices Leave Minority and Women-owned Businesses (M/WBEs) Behind

New York, NY - New York City Comptroller Mark Levine's annual review of City Minority and Women-owned Business Enterprise (M/WBEs) Procurement for Fiscal Year 2025 reveals persistent underperformance across city agencies. Despite the City's goal to address historic inequities in City contracting, the City awards just $2.4 billion (5%) to M/WBEs.

"New York City's greatest resource is its diversity," said New York City Comptroller Mark Levine. "When entrepreneurs of color and women are excluded from procurement, the City entrenches economic inequality, stifles innovation, and kneecaps economic growth. We must make our procurement system agile, transparent, and equitable for all New Yorkers and for the minority owned businesses that serve them."

The City's M/WBE program-governed by Section 6-129 of the Administrative Code-was designed to expand access to government contracts. Since the Comptroller's Office published its first annual report on M/WBE contracting in Fiscal Year 2022, in 2025, the City Council passed Local Law 77 ("LL 77"), which requires this Office to publish annually, beginning with this year's Report.

In his first annual report, Comptroller Levine examines procurements subject to Local Law 174 participation goals, which can be met by awarding a prime contract to an M/WBE or by requiring a non-certified prime vendor to subcontract a specified percentage of the contract value to M/WBEs. When used effectively, participation goals ensure maximum M/WBE utilization even when the procurement process does not award a contract to a M/WBE prime.

The annual report's key findings include:

• Meager Share of Contracts to M/WBEs: Only 5% ($2.4 billion out of $46 billion) of Citywide procurement value is awarded to M/WBEs, and of the contracts subject to M/WBE participation goals ($17.5 billion), M/WBEs received only 8% ($1.5 billion).
• Stagnant Participation: Only 22% of City-certified M/WBEs entered into a new contract, subcontract or purchase order under the City. At the end of the fiscal year, there were 11,382 certified M/WBEs. Just 2,478 entered into a new contract or PO in FY25.
• Contract Value Gap: The average value of a M/WBE contract was five times less valuable than the average contract of a non-certified firm. For contracts subject to M/WBE participation goals, the average value of a contract registered to a non-certified firm was over $3.6 million, but the average M/WBE contract was just under $754,000.
• Chronic Contract Delays: 65% of all M/WBE contracts were registered after the contract start date. 35% of all M/WBE contracts were registered more than a month after the contract start date.
• Disparities Within Disparities: Businesses owned by women of color and Black and Hispanic American men win far less in contract value.
• Low Subcontracting Reporting: Prime vendors only reported subcontracts for 9% of contracts subject to participation goals registered since FY22, though we know there were many more subcontracts unreported. City systems only show subcontract records for 1,107 of the nearly 12,000 prime contracts subject to M/WBE participation goals. This number is likely much higher, but the lack of data transparency hinders the ability to track success and areas of improvement.

To bridge these gaps, Comptroller Levine recommends that City agencies work with M/WBEs to address the chronic pain points in the City's procurement process that prevent M/WBEs from successfully bidding and performing. Comptroller Levine's report outlines key recommendations, including:

• Streamlining M/WBE Requirements: Simplify the certification processes by creating one repository of current and planned procurement opportunities, and standardizing commodity codes and other resources that connect M/WBEs to agencies.
• Expand the Pool of M/WBEs: The City should also publish a list of the goods and services each agency typically purchases, as well as report on the goods and services offered by the current pool of certified M/WBEs.
• Shorten Contracting Timelines and Eliminate Retroactive Registration: Streamline all stages of procurement and establish reasonable time frames for each step, plus realistic accountability mechanisms for agencies.
• Capture Subcontractor Data in PASSPort: Build stronger oversight mechanisms in PASSPort, the city's digital procurement portal, to ensure City collects the data required to track and monitor subcontractors.
• Proactively Recertify M/WBEs: Small Business Services should conduct proactive outreach to M/WBEs ahead of certification lapse and work with agencies to monitor certification status of current contractors, to help M/WBEs avoid a lengthy recertification process.

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